Australian wine and grape industries in perspective - a decade of growth

The Australian wine and grape industries have experienced strong growth over the past ten years. Production of grapes for winemaking and production of wine both more than doubled in the period 1992-93 to 2002-03. Although grape and wine production fell in 2002-03, at a time of drought in most regions, domestic and export sales of wine continued to grow. Total exports of Australian wine exceeded domestic sales for the first time in 2001-02 - a pattern repeated in 2002-03.

Area of vines

In the ten-year period from 1992-93 to 2002-03 the total area of vines being cultivated more than doubledfrom 62,709 hectares (ha) to 157,492 ha (table 14.31). The area of vines in South Australia, the main source of grapes, increased 40,520 ha (to 66,654 ha). In New South Wales the increase was 24,358 ha (to 37,039 ha) while the vine area in Victoria increased by 18,221 ha (to 38,284 ha). The area of vines in the remaining states and territories grew by 11,235 ha (to 15,066 ha).

The area of vines not yet bearing is an indication of the growth in plantings. The total area of vines not yet bearing grapes increased by 24,899 ha from 1992-93 to 1999-2000 (graph 14.32). As these vines matured, there was a reflected increase in the area of vines bearing grapes which resulted in a 42% (or 32,533 ha) increase between 1997-98 and 1999-2000. This growth spurt has been followed by three years of reduced area of vines not yet bearing, indicating a reduction in plantings in recent years. The area of vines bearing grapes increased 50% from 95,301 ha in 1998-99 to 143,373 ha in 2001-02, with a slight decrease in 2002-03.

14.31 AREA OF VINEYARDS

Bearing

Not yet bearing

Total

ha

ha

ha

1992-93

58,369

4,339

62,709

1993-94

61,362

5,711

67,074

1994-95(a)

62,454

10,415

72,869

1995-96(a)

64,845

15,715

80,559

1996-97

72,119

17,678

89,797

1997-98

78,090

20,521

98,612

1998-99

95,301

27,614

122,915

1999-2000

110,623

29,238

139,861

2000-01

130,591

17,666

148,257

2001-02

143,373

15,222

158,594

2002-03

142,793

14,700

157,492

(a) Excludes ACT and NT.

Source:Australian Wine and Grape Industry (1329.0).

Grape production

In 2002-03, 89% (1,329,595 tonnes) of all grapes produced (1,496,939 tonnes) were used for winemaking, 6% (92,264 tonnes) were used for drying and 5% (75,080 tonnes) were produced for table and other grapes(graph 14.33).

The production of grapes used for winemaking more than doubled from 544,487 tonnes in 1992-93 to 1,329,595 tonnes in 2002-03. There was a sustained increase over the five-year period between 1996-97 and 2001-02 before drought conditions forced production down. Production fell by 184,906 tonnes in 2002-03 following the record production of 1,514,501 tonnes in 2001-02. The regions contributing most to growth between 1996-97 and 2002-03 were South Australia, up 244,303 tonnes (to 612,095 tonnes), New South Wales, up 188,261 tonnes (to 362,526 tonnes) and Victoria, up 100,667 tonnes (to 282,439 tonnes).

There was a 51%increase in the production of table and other grapes over the ten-year period from 49,681 tonnes to 75,080 tonnes while the production of grapes used for drying decreased by 104,784 tonnes (or 53%).

Grape varieties

The 1,329,595 tonnes of grapes produced for winemaking in 2002-03 comprised 772,522 tonnes of red grapes (58%) and 557,074 tonnes of white grapes (42%). By comparison, of the winemaking grapes produced in 1992-93, 29% were red grapes and 71% were white grapes, indicating a shift in consumer preferences and export demand over the past decade.

The top five varieties of red grapes produced for winemaking in 2002-03 were shiraz (40% of all red grapes produced), cabernet sauvignon (29%), merlot (12%), ruby cabernet (5%) and pinot noir (4%)(graph 14.34). The two biggest contributors to the very strong growth in red grape production over the ten years were shiraz, increasing by 252,603 tonnes, and cabernet sauvignon, increasing by 187,871 tonnes. Merlot has also played an important role in increased red grape production with the 4,767 tonnes produced in 1992-93 jumping to 92,865 tonnes in 2002-03.

The top five white grape varieties produced for winemaking in 2002-03 were chardonnay (42% of all white grapes produced), semillon (14%), colombard (10%), muscat gordo blanco (8%) and sultana (6%)(graph 14.35).In 1992-93, 14% of all white grapes produced for winemaking were chardonnay grapes, compared with 42% in 2002-03. On the other hand, in 1992-93 over a third of white grapes were comprised of sultana and muscat gordo blanco grape varieties, but they only contributed 14% in 2002-03.

Wine production and grapes crushed

Following the increased production of grapes for winemaking in the past ten years, grape crush and wine production have also shown strong growth. The grape crush for 2002-03 was 123% or 772,341 tonnes greater than in 1992-93. However, there wasa 13% fall in the quantity of grapes crushed between 2001-02 and 2002-03 to 1,398,528 tonnes. Both red and white grape crushes fell from 2001-02 to 2002-03, by 9% and 18% respectively.

In 2002-03 South Australia accounted for the largest proportion of grapes crushed with 46%, or 646,922 tonnes crushed. This is a 126% increase on their 1992-93 crush of 286,718 tonnes. New South Wales contributed 34% or 474,653 tonnes of grapes crushed, more than double the230,426 tonnes crushed in 1992-93 while Victoria’s crush in 2002-03 accounted for 15%, or 211,094 tonnes, up 115% from the 98,106 tonnes in 1992-93.

Beverage wine production more than doubled over the past ten years, up from 414.8 million litres in 1992-93 to 1,037.6 million litres in 2002-03(graph 14.36). The first decrease in the production of beverage wine recorded in the past six yearsoccurred in 2002-03, with production falling from the previous year's record of 1,174.1 million litres. Despite this, the 2002-03 beverage wine production was the second highest volume recorded.

South Australia has been the dominant wine producing state for the past ten years(graph 14.37). In 2002-03 South Australia accounted for almost half (49% or 506.7 million litres) of total beverage wine production, an increase on its share of production in 1992-93 (42%). New South Wales/Australian Capital Territory contributed the next largest share at 33% or 337.4 million litres production in 2002-03 (compared with 40% in 1992-93). Victoria produced 15% or 152.9 million litres in 2002-03 (compared with 17% in 1992-93). Overall, the top three wine manufacturing states accounted for 96% or 996,994 million litres of total beverage wine production in 2002-03 - in 1992-93 these three states accounted for the entire production of Australian beverage wine.

Over half of all red wine production in 2002-03 was produced in South Australia (57% or 340.1 million litres) with New South Wales/Australian Capital Territory contributing a further 27%, or 160.0 million litres (graph 14.38). New South Wales/Australian Capital Territory produced the largest quantity of white wine (40.7% or 171.2 million litres), followed closely by South Australia with 37.5% or 157.4 million litres.

Consumption of wine in Australia

Total annual domestic sales of Australian wine by winemakers has risen by 29% over the past ten years, from 312.1 million litres in 1992-93 to 402.5 million litres in 2002-03. This increase has been driven by table wine sales, up by 40% during this period, while the volume of all other wine types combined fell 12%. The increase in table wine sales over the period has been led by increased sales of red wine.

The other major component in the total domestic consumption of wine is the volume of imported wine released for consumption. This has varied significantly over the past ten years. From a base of 7.8 million litres of wine imported in 1992-93, it has doubled to 17.1 million litres in 2002-03. However, during this period it has been as high as 25.6 million litres (in 1997-98) and has averaged 17.0 million litres per year over the period. This compares with an average of 9.5 million litres per year in the ten years to 1993-94. It suggests that during the period of expansion in wine production and sales since the early-1990s, Australian winemakers have balanced the combined demands of domestic and overseas wine consumers, by adjusting their intake of imported wine.

Annual per person consumption, for people aged 15 years and over, has steadily increased during most of the past ten years, from 23.4 litres in 1992-93 to 26.9 litres in 2002-03. The movement in the past decade is in line with the longer term trend which has seen the per person consumption of wine climb from levels of less than 3 litres in the late-1930s. By way of contrast, in the ten years to 2002-03 the per person consumption of beer has fallen 10%.

Disposals of Australian wine

While domestic sales of Australian wine increased by 29% in the past ten years, exports have experienced a much greater increase. Over the period, exports have increased five-fold from 102.8 million litres in 1992-93 to 518.6 million litres in 2002-03. The total annual exports of Australian wine exceeded domestic sales for the first time in 2001-02 - a pattern repeated in 2002-03 (table 14.39).

In 2002-03 Europe received the largest share of exports (56%), the North American share rose considerably to 34% while Oceania fell to 7%. In 2002-03 the countries with the major share of the export volume were the United Kingdom with 209.5 million litres (40%), the United States of America with 150.9 million litres (29%) and New Zealand with 32.2 million litres (6%). The European Union, which includes the United Kingdom, received 281.5 million litres or 54% of Australia's exported wine in 2002-03.

14.39 DISPOSALS OF AUSTRALIAN PRODUCED WINE AND WINE AVAILABLE FOR CONSUMPTION

Domestic sales of Australian produced wine (1)

Wine imports cleared for home consumption

Wine available for consumption(a)

Exports of Australian produced wine (2)

Total disposals of Australian produced wine (1 + 2)

'000 L

'000 L

'000 L

'000 L

'000 L

1992-93

312,083

7,832

321,870

102,832

414,915

1993-94

319,532

8,341

330,424

125,464

444,996

1994-95

313,357

14,057

329,929

113,663

427,020

1995-96

309,463

20,256

332,191

129,671

439,134

1996-97

333,591

13,589

349,674

154,393

487,984

1997-98

338,814

25,622

367,494

192,404

531,218

1998-99

348,349

24,255

375,480

216,149

564,498

1999-2000

369,271

19,607

392,486

284,935

654,206

2000-01

384,847

12,773

401,299

338,289

723,136

2001-02

386,232

14,478

404,235

418,393

804,625

2002-03

402,479

17,112

423,774

518,642

921,121

(a) Includes domestic sales and imports plus an allowance for home production.

Australia's vineyard area, wine production and wine exports have all increased significantly in the past ten years. The relatively small domestic market means Australia currently exports more domestically produced wine than it consumes. Of the countries for which the latest data (2001) is available, Chile was the only other country to achieve a higher export proportion than Australia. In 2001 Australia ranked 12th in area of vines planted (compared with 21st in 1992), 10th in terms of grape production (16th), 7th for wine production (11th) and was the 4th largest wine exporter by volume (8th).